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National Commercial Bank (NCB) offers 9% farm loan

Published:Sunday | March 28, 2010 | 12:00 AM

National Commercial Bank (NCB) on Wednesday, in partnership with the Ministry of Agriculture and Fisheries, launched a new loan product that offers farmers up to $2 million of credit at nine per cent interest per annum, the cheapest to hit the market.

But applicants have a short window of just over a month, to April 30, to file applications for the cheap funds.

Beyond that period, the price of the loan climbs to 15 per cent.

Borrowers must be either onion, irish potato or pepper farmers.

Bank of Nova Scotia (BNS) Jamaica also has cheap funds at 9.95 per cent on the market, through a facility it calls the Productive Sector Growth Fund (PSGF), available to farms and agro-processors.

fund not new

The fund is not new, but BNS says it is ramping up promotion of the financing window this year.

Pat Beecher of BNS' credit risk management unit said Monday that the PSGF was tapped for loans in 2009 for agriculture projects that included poultry rearing, coffee and cash crops.

Bank of Jamaica confirms that agriculture loans, though relatively small, are growing, while demand for credit in other major sectors is in decline or remains flat.

From $4.6 billion in 2008 - a period in which agriculture loans more than doubled - banks issued $5.5 billion credit to farmers in 2009 to set a new record in the sector.

Total bank loans issued at December 2009 was $49 billion, up from $40 billion in 2008.

In 2009, agriculture production grew 13 per cent up to November, according to the agriculture ministry, which is overseeing a 'food security' programme to gin up production of local crops.